The General Assembly of Etisalat today approved the recommendation of the Board of Directors to distribute dividends at 35% of nominal share value for the second half of 2009. This makes the total dividend awarded by Etisalat in 2009 to be 60 %.
The General Assembly also decided, during its Annual General Meeting, to issue 10% bonus shares (one bonus share for every 10 shares).
Etisalat’s performance statistics:
• Aggregate subscriber’s base exceeded 107 million, representing an increase of 34%.
• Consolidated revenue was up more than 5% to AED 30.8 billion.
• Earnings per share (EPS) grew 4.2% to AED 1.23 per share.
• Dividends distributed to shareholders totaled AED 3.9 billion, an increase of 20% from 2008.
• Maintained strong cash balance at AED 11.3 billion driven by strong cash flow generation. This cash position allowed Etisalat to have strong credit ratings, pay dividends, continue to invest in networks and finance acquisitions.
• Negative net debt position of AED 7.5 billion that is uncommon to see in the telecoms industry.
Comments from Mohammad Omran, Chairman of Etisalat
I would like to take this opportunity to emphasize the Corporation’s sincere gratitude to the leadership and government of the UAE for their continued support of the Corporation, and also compliment them on the astute fiscal and structural macro-economic measures which have been introduced to ensure sustained prosperity and growth in the UAE
2009 marked a new chapter in the ongoing success story of Etisalat. Our main successes came in two fields – operational and financial. Despite the economic crisis and its impact on the whole world even the strongest sectors – Etisalat still achieved growth and positive results. We continue to make strategic investments to help us to secure our future and ensure shareholder value in the long-term.
Nevertheless, this does not mean that we were immune to the economic slowdown. Our sales growth was impacted in selected markets and margins came under pressure as customers rationalised their total spending and as competition intensified across all markets including the UAE. This was further worsened by unfavourable movements in foreign exchange rates. However, we responded by enhancing our product portfolio and adding several value-for-money offerings. In addition, we rationalised our investments and expenditure and placed more focus on solidifying our financial strength and liquidity. Furthermore, the Corporation leveraged its advanced 3G and WiMax networks to introduce attractive wireless broadband offers increasing the overall value proposition and creating new segments in the market.
We maintained our disciplined approach in our international strategy and evaluated investment opportunities more cautiously. We improved our presence in the Asian market by adding Tigo, the second mobile operator in Sri Lanka to our international portfolio. This acquisition fits into our expansion strategy and will be accretive to shareholders long term value. As for the rest of our portfolio, we keep investing in our networks to improve capacity, coverage and quality to enable us to build market share. We plan to continue expanding our reach in targeted regions and further establish Etisalat as a trusted brand for a global telecom service provider.
Despite the challenging market conditions, shareholders of Etisalat have been well rewarded for their investment. The Corporation has declared a total dividend of AED 0.60 per share for 2009, representing a dividend yield of 5.45%. Shareholders have also been rewarded through an increase in the share price, which grew by 33% in 2009. In addition, the Corporation will make a federal royalty payment of AED 8.8 billion to the Federal Government.
Comments from Nasser bin Obood, Acting CEO of Etisalat
Despite the economic slump, the mature mobile market in the UAE where the total number of subscribers surpassed 10 million with the penetration rate exceeding 200%, and the intensified competition that resulted in reduction in international tariffs, Etisalat managed to lessen the impact of these factors on its operational and financial results. This was mainly accomplished by seeking new revenue streams through improving and upgrading our network with advanced technologies to enable the offering of new products and services. These included higher speed broadband packages, improved value added services, iPhone 3G and 3GS, new promotions like “Pay AED 75 for a new Wasel Connection with 100% cash back”, “Wasel 24 millionaires’ campaign”. In addition, new distribution channels have been developed to ensure we reach customers across the UAE.
These efforts, together with implementing a combined strategy, focusing on new customer acquisitions and increasing customer loyalty proved a great success in reinforcing Etisalat’s position as the leading telecommunications provider in the UAE. Net revenue for the UAE operations marginally declined by 0.7%, however proactive cost optimisation measures resulted in net profit growth of more than 9% after normalising the 2008 result for the one-time impact from the sale of Mobily’s shares. On the operational side, Etisalat UAE continued to post growth in the number of subscribers despite the high penetration rate. Accordingly, the mobile subscriber base grew by 6% to 7.74 million and internet subscribers grew by 15% to 1.33 million.
Our commitment to offer cutting edge-technology was boosted by having completed 60% of the roll out of the Fibre-To-The-Home (FTTH) network in the UAE. We have intensified our efforts to achieve 100% coverage of the UAE by 2011 and we are close to making Abu Dhabi the first capital city in the world with 100% fibre deployment by 2010. Additionally, it was a great delight to see our Double and Triple Play services launched in the market under the name of “eLife” - services that combine broadband internet access, landline and IP TV services in one bundled offer. eLife will boost the adoption of high-speed internet services and will also enable our customers to experience service quality while running applications like video on demand and online gaming.
Etisalat has already started to implement the initiatives as the Board meeting in 2010 directed. We have now formed the Etisalat Foundation to manage our sponsorships related to Corporate Social Responsibility, we have also initiated 2010 as the year of customer excellence and also increasing the number of UAE nationals employed within the company.
None of this could be achieved without the dedication, professionalism and knowledge of our employees who are all contributors to our results in their daily work at all levels. Furthermore, I would like to take this opportunity to thank and value the leadership of the country and the UAE Government for taking a lead in responding to the economic slowdown by announcing stimulus packages and other efforts to support the economy and stabilise the financial market.
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